Decision on Central States This Week

Posted on May 02, 2016

The U.S. Treasury Department will issue a decision this week whether to approve or disapprove the drastic pension cut plan proposed by the Central States Fund. A lot is riding on the decision – and even more is riding on what comes after the decision.

What Will Treasury Decide?

The pension protection movement has made this a real question, instead of just a rubber stamp of the drastic pension cuts. Thousands of Teamsters and retirees have marched, rallied, visited Congressional offices, written letters, attended town hall meetings, and ridden buses all night to the Capitol.

We’ve been interviewed by hundreds of newspapers, TV stations and other media outlets. We met in union halls, K of Cs, and Holiday Inns across the South and Midwest.

We’ve reached out to allies and multiplied our impact. We turned around the official position of the IBT from supporting the lobbying efforts that led to the disastrous law (MPRA), to opposition to it and support for the Keep Our Pension Promises Act. Forty six Senators wrote to the Secretary of the Treasury urging a rejection of the Central States cuts.

But we don’t know the outcome. Treasury’s Special Master Ken Feinberg listened to thousands of retirees say No, but he emphasized that he is bound by law to follow MPRA.

He will issue his decision next week – a fateful one for 400,000 Teamsters and retirees.

What Does a NO Mean?

The battle goes on.

A No will send the issue back to Central States, and they will be free to resubmit a revised proposal in conformity to the law and guidance from the Treasury Department. When they would do that, we don’t know. Any re-submission would have to go through a similar process. And a re-submitted plan could possibly be even worse.

A No will not solve the problem, but it will buy us valuable time to keep building the movement, building support for KOPPA or an equivalent viable solution. Time to work to expand our forces and protect pensions from such drastic cuts. Time to build our army to win the war.

The Fund will still be headed downhill if the plan is rejected, so the urgency will still be there. We will never stand still for our fund to go broke, and leave high and dry all the active Teamsters who have worked 20 or 30 years, to be told “there’s nothing left for you.”

The pension movement stands for solidarity with all Teamsters – active and retired and those vested but not yet collecting. Central States Director Thomas Nyhan will say we just want to pay out the money and let the fund go broke, but he’s selling us short. We are Teamsters standing together.

A No vote will put more pressure on Congress to finally take action to fix MPRA.

What Does a YES Mean?

The battle goes on. A Yes will be a set-back for sure, but this movement is not about to quit or give up.

Treasury will conduct a vote soon after approval, with all actives, retirees, and vested participants getting a vote. A mailing will go out, and as the opposition, the pension movement will get to include a statement advocating rejection. MPRA stacks the deck by counting non-voters in the Yes column. We need to work hard to generate a solid NO majority.

We will aim to win that vote. And even if our vote can be overridden by counting non-voters or the Treasury Department declaring that Central States is “too big to fail onto the PBGC” we will score a win, showing that the majority of the actives and retirees stand with the movement.

We will continue to build our movement, spread our campaign, organize and inform thousands of retirees, and win a just solution. This movement will continue to be the voice for Teamsters and for all Americans who have or deserve a pension.

We may have a cause for litigation, but we will not rely solely on that. We will rely on what has gotten us this far – grassroots organizing and smart alliance building.

Interesting! We would have been much better off had the mobs kept on doing what they were doing way back when rather than the gov’t, etc taking over. At least we knew the mob was crooked. We didn’t know the gov’t and the big banks, Wall Street, etc were.

Richard Dorrough commented
2016-05-05 15:21:15 -0400

Under ERISA all fund trustees are personally liable and can be sued for breach of fiduciary duty. .Each one also is bonded usually for 2 million each..Here is a case with a Union International suing all its fund trustees for show and then letting them off the hook. We had been demanding they sue the trustees and they refused. What we did not know was they were suing them the whole time.12-CV-02331 Eastern Dis Court of NY..12-CV-02333..12-CV-2764.. They combined them into one case.
We had an EBSA investigation (Boston Office) going on into the fund for close to two years and could not figure out why the EBSA refused to do anything. We did not know about Borzi and the NCCMP.We did know that the Unions law firm aligned against us finding out anything partner Robert Archer was on the legal advisory board for ERISA. After the EBSA dumped our case the attorney handling us Gary Thayer(an ex EBSA investigator out of NYC) took his place
After one year we got a call saying they were splitting the case. Richard Nunes would be doing the Pension fund and he was handing off the Annuity,health and vacation fund to Investigator Amy Fried. Two days after he gave Amy Fried half the case she went on maternity leave for 6 months.
So a short time after she returned we were notified they were dumping our case and found nothing wrong. While our Investigation was open all fund trustees were fired and sued for allegations of corruption and Breach of Fiduciary Duty. While our Investigation was open fund mangers and advisers were fired and accused of malfeasance.While our Investigation was open the funds lost hundreds of millions to Madoff.While our Investigation was open the fund Chairman, who had an 8 year history in the newspapers for his connection to the mob yet the UBC kept him in office, was arrested in NYC where he was only a Trustee on their fund and accused of funneling about $20 million to the mob. The UBC International and the EBSA was asked to investigate any money he may have funneled to the mob as CHAIRMAN of our fund. Both refused.
So even though while our Investigation was open all this happened (plus the allegations listed in the lawsuit) yet the Boston office of the EBSA found no wrong doing. So under the EBSA decision whatAll these people were innocent and we really did not lose hundreds of millions to Madoff

I believe I saw in the CSPF paperwork that we are not allowed to sue them. How can that be enforced? I do know in some gov’t entities you have to ask them if you can sue but not in any private entities.

I have seen there is a bill going through the Senate RE: the pension fund officers being cut by the same amount as they are trying to cut the most percentage or the retirees…

Just had scrolling across the bottom of the screen of Good Morning America that you are now allowed to sue financial institutions that mismanaged your money. Well when we stated receiving letters about the pension being underfunded why in the heck didn’t someone say to chase and morgan stanley are you moving our money around and finding better places to invest it? We called every time we got that letter and they kept saying don’t worry its the law we have to send out those letters, everything is fine. Central states lied right to my face about it

Tom Dolyniuk commented
2016-05-04 19:48:46 -0400

If the proposal in accepted ant cuts go into effect UPS would have to take 3;2 TO 3,8 billion dollar hit because in 2007 they agreed to provide supplemental payments to retirees if their pensions were lawfully reduced!! This would include all UPS employees that retired after Dec. 2007.

Tom Dolyniuk commented
2016-05-04 14:15:44 -0400

Karen Freidman just talked about 5 minutes on CNBC about the Teamsters Pension crisis. When asked by Tyler Mathison, how the shortfall should be funded she stumbled, with no specifics. She said possibly that companies could contribute more ( 15k/person is not enough?). She is dreaming here!!! This is the fundamental problem, NO CUTS, but how will the money be funded, exactly!!! In 2009, Fienberg stated that Goldman Sacs and JP Morgan paid back their bailout money so their executive compensation was not reduced. However ,he stated that the AIG executive compensation was to be capped at 200k, because they hadn’t paid the money back yet. When asked if the executive compensation at Central States would be reduced, he emphatically replied, NO. Connect the dots here!! Central States has no way of paying back any money, and do you think that NYHAN would take bailout money if it meant that his compensation would be reduced by government?

James Smart: I am not the only one who is angry. Have you been sleeping for the past 7 months that you don’t know this?
If you were reading all the comments on the Treasury pages, you may have noticed that people in the rank and file questioned the status of the fund but were assured that was just because they were required to say that. They also stated we would not be cut. Then they lobbied Congress ( with our money)! to present the MPRA bill in the middle of a too big to fail budget bill as they knew it would not pass on it’s own merits. As usual, Congress didn’t read it and maybe discussed it for a few minutes. (Everyone of them should not be reelected just on the basis of them passing stuff through which has not been hashed out). We were totally blindsided and using our money to lobby was another slap in our faces.

You who are still active participants have many more opportunities to save up on your own. 401k’s, Roths and probably more that we had no access to. You are starting out at a wage we didn’t have way back then. I remember starting at under $9.00 an hour and I worked very hard for that. Ended up at around $23.+ an hour after 25 years.

We had equipment back then with no air conditioners and inadequate heaters as well as rough riding so we either cooked or froze for our hours of being beat to death behind the wheel. That has to count for something. My first tractor was a ’60’s something Diamond T; not exactly a Pete or KW.

Richard Dorrough commented
2016-05-04 11:52:42 -0400

Remember that MPRA is the law not ERISA. Actually YOU are incorrect The MPRA is legislation that made changes to multiple sections of ERISA. ERISALAW regulate all funds and not the MPRA. The MPRA allows the change in ERISA for them to be able to steal from retirees. The MPRA changes ERISA sections so the Funds no longer have to produce any fund documents to participants older than 6 years. Lets have you explain to us how or why that language was included to help solve the underfunded problem.
Next you claim “the Teamsters Union lobbied with $6.2 million for MPRA” please provide the location of the proof for that amount. Does this amount include any lobby money paid by Central States Fund to the lobby firm.Who did they make the payments to. Groom. Allston and Byrd??Further were the Teamsters funding lobbying for MPRA at all and why were /are both Hoffa and Nyhan members of the NCCMP.

We live in the real world also Mr. Smart, where the people are greedy and self serving as you put it. So stop downing all the drivers who retired and are demanding what we were promised we would receive. What does your work history consist of? I cannot describe the physical work I did unloading trucks full of tires etc. let alone being away from my family and missing my kids events. If you say that was a choice you made Mel, yes it was because it provided for my family and assured me I would have a pension when I finally could not do it anymore. So call me a greedy for what I was promised and deserve. The Teamsters employees put the money in the hands of people like you who crunch all the numbers so who failed here buddy? Who is the whiner? We did our work Central States did not do theirs.

Tom Dolyniuk commented
2016-05-04 02:45:21 -0400

Lorelyn, yes Central States is paying PBGC insurance, although the retiree representative suggested to eliminate it. I believe that it is around 5 or 6million/year. PBGC has only around 1 billion in assets, not even enough to pay for one year of CSPF retiree payments, if Central States becomes insolvent.

Tom Dolyniuk commented
2016-05-04 02:36:02 -0400

Lorelyn, why are you so angry? You have been collecting your whole amount for many years despite the critical status of the fund. Think of how good that you have had it relative to an active participant! Clearly, Central States also wants the cuts so that they can keep their jobs (23 people making over 200k/year). Remember that MPRA is the law not ERISA. If all promises were kept their would be no divorces either. I live in the real world, where people are greedy and self serving! Do you really think that all of the “hardship” stories of retirees will affect Feinberg’s decision?

James Smart or whatever your name is , Tommy D?: You have a great memory that you remember what some 2,000 + commenters wrote in their comments. Quite amazing. I did also say that I couldn’t remember how much was going in at the beginning of my career back in 1974, so I just used the $300.+ number. How many others are you stalking?

We older retirees are who made these billion $$$ companies into what they are now; for better or worse and we are getting shafted. I drove tractors without power steering for the first 24 years or air ride seat for the first 15 or so years. What kind of equipment do you operate?

Where are people who are close to 70 or over going to get a job to replace what those either corrupt or downright criminal bums at the top of CSPF are going to steal from us?

Taking your number of 6.2 million that they used for lobbying for MPRA; who the F said they could use retirees money in order to take our money away from us? That was/is not their private piggybank. That was for the benefit of retirees.

Tom Dolyniuk commented
2016-05-04 01:28:05 -0400

The Pomeroy bill of 2010, was supposed to increase the PBGC funding, but it was not passed by Congress. Without a bailout such as KOPPA, there are no reasonable alternatives other than the cuts. Feinberg must “obey the law”. You don’t have to read between the lines to figure out what is coming!

Tom Dolyniuk commented
2016-05-04 01:12:09 -0400

MPRA was passed in Dec 2014, It has taken over 16 months for some resolution ( decision on CSPF proposals), of which 225 days were by the Dept. of Treas. and around nine months for Central States for the proposals. During that time NO KOPPA bill was introduced. Why? During this time, the fund assets have shrunk to around 15 billion!! Prior to 2014 , the ERISAACT, dissallowed cuts to retirees, so instead CSPF cut the accrual rate for actives in 2004 from 2% to 1% ( a 50% cut ) plus they implemented a 6% per year deduction prior to age 62. Under the CURRECT rules, it would take exactly 100 months or 8 years and 4 months just to get back the money put into the fund. If the proposal is accepted, the 1% accrual rate will be reduced to .75 and it will take over 11 years to get it back and the 6% deductions will be phased into age 65. CLEARLY, this is a terrible deal for active participants who have not yet received a PENNY. Instead, under the Ponzi scheme, the current contributions are used to pay for retirees , Nyhan and his staff, and Northern Trust. It is ironic, that the retires are complaining the most, when it is clear that the active employees have had it the worst, and will continue to have it the worst!!
Also, Lorelyn Essig, the Teamsters Union lobbied with 6.2 million for MPRA, NOTBILLION, as you stated. It was not the same amount as the UPS 6.1 billion! Plus you wrote to the Dept of Treas that you put in over 300/wk for your entire employment at UPS, which is untrue. Please. try to get your facts straight. Currect contributions at my compamy are 15k/year , but 40 years ago they were well under 1k/year. If the proposal is accepted, your monthly payment will be 1% of your total contributions ( unless an orphan) but not less than 50% of your current pension if you have 20 or more years of contributions. that is one way to estimate your total contributions.

Sorry I typed it wrong. You are right Lorelyn about the example you gave. I think a lot of rules were made up as they went along to benefit them and to produce the result in their favor no question about that. You have a lot of retired Teamsters that would count them if given the chance just to keep it on the up and up!

Melvin, everything you said is the truth except for one important one. A non vote will be counted as a Yes vote.
What if that happened on a vote for an 8 billion $ school levy? If they tallied every possible voter in a precinct and added all the people who did not cast a ballot as a yes vote and the thing passed? There would be people with pitchforks and torches marching in the streets.
This important vote should be done by a completely disinterested party; one that cannot be swayed to count them so there is a certain outcome and there should be observers there as well.

I wondered where all the comments went also. We need to let everyone know if you receive a ballot to vote. I hope everyone is aware of the non vote will be recorded as a No. Do we get to have someone there to help count the votes? Ha! This is a nightmare that our government has allowed this to happen and I think that is what makes it so hard to swallow is that our government does not care about what happens to its own people but they make headline news when we are the first to offer aid and assistance to other countries. God help us and our children and grandchildren. Lived by the rules my entire life and I am ashamed to say we probably need to teach our young to care only about yourself and grab all you can and do whatever it takes to do this . Now I know why so many people from my dads generation hid there money under their mattress and in the walls. Very smart people!!

Bob Krouse made an interesting comment; All NON-VOTESCAST will be “recorded” as YES votes according to CSPF. If we don’t get a vote to cast then we will all be voting yes??? These people at CSPF are as crooked as a dog’s hind leg; I wouldn’t put anything past them doing to get their way.

“A decision from Treasury is expected by May 7, 2016. Benefit reductions under Central States’ proposed pension rescue plan will, under current rules, become effective around July 1, 2016—if approved by both Treasury and……… a subsequent vote of our plan participants.”

My understanding is the decision is suppose to be by May 7th which is a Saturday, More than likely we will hear by Friday don’t you think. I have not received a ballot either. So if they make the decision by May 7th then send out ballots to vote, allow time for those to be received , count them and if it does go in their favor change the employment rules and allow guys to get jobs in the trucking all by July 1st? I did get one letter last week talking about the pension money and the dire straights it is in. It said it was one of two mandatory mailings required to be sent out. There is going to be a lot of sixty and seventy year old drivers out on the road which is fine but some may not be healthy enough which is the reason they probably retired!!!

Treasury said a decision will be decided on Saturday the 5th. of May.
However the lady I spoke with said any information on ballots would have to be taken up with Central States.
I have received information from many Teamster members that no one has been aware of any ballots received. Therefore all NON-VOTESCAST will be “recorded” as YES votes according to CSPF.

@justin Tyme: Your comment that, “Pensioners will still be receiving vastly more money than they paid in”, is a ridiculous thing to say. I suppose you feel that if you opened an IRA or a 401k or held Bonds, that after 30 to 40 years you should only be able to withdraw the equivalent of what you put in. If that were the case, you might as well put you money in a pillow case, because that’s the scenario you’re painting. The “Rule of 72” shows that a modest 6% average annual rate of return, which is easily attainable in the stock market, will double in value every 12 years. Simply put, $1000 will be worth $2000 after 12 years, $4000 after 24 years, and $8000 after 36 years, or an 800% return and that doesn’t include any additional monies that were contributed over that 30 to 40 year period.
So, why don’t you go troll some other site now and leave hard working men and women, who earned their retirement pensions, alone.

Loot, pillage, mismanaged, you can say that about any kind of fund. Some the biggest hedge fund today are being liquidated because of poor performances, high fee’s, and what their investors call mismanagement. That’s what happens when your sole source of gain is reliant on the vagaries of Wall St.

How do you fix too many piglets and not enough nipples? Worker to retiree ratios. This is where I get the biggest chuckle: “Rush to Cut”. Rush? They are 30 years behind the ball in equalization of workers to retiree to promised benefits.

The Teamsters bosses at every level want to keep their jobs, look good during contract negotiations, and found it easy to just rob UPS workers to sweeten benefits for other members. Those other companies scratch their collective heads when lower benefits, wages, or concessions were negotiated while the Teamsters were telling those workers they would still get better retirement benefits. With what money they asked? Not to worry said the Teamsters we’ll just take more from the UPS workers.

So it’s not just bad investments. Investments mind you they took a far more aggressive approach too simply to try to keep up with that obviously broken worker retiree benefits promises. It was a faulty antique multi-employer pension system scheme that should have been reformed the minute the worker to retiree ratio fell to 5 to 1. SO, for current retirees facing cuts I say this: Where have you been? The writing has been on the Wall for decades. There’s a couple of old saying in law: Due Diligences and What Did You Know and When Did You Know It?

Anyone that’s claiming to be knowledgeable and financially caught with their knickers down isn’t being honest period.

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